Dell Trying to Settle Federal Allegations Related to Dealings with Intel

Dell also announced it has revised its first quarter results by adding $100 million for a potential settlement related to the SEC (News - Alert) investigation and other accounting issues.

"We are hopeful that these settlement discussions will achieve a comprehensive resolution in the near future. The independent directors of the Board have affirmed that Michael Dell will continue to lead the company as its Chairman and CEO, and he continues to have our complete confidence and support,"  Sam Nunn, presiding director of the Dell Board, said in a statement on Thursday.

Nunn, a former Democratic U.S. Senator, recently has been an informal advisor to President Barack Obama.

Any settlement would not bar Michael Dell from being an officer or director of a public company, the company announced. It added that any settlement would be made without admitting or denying the SEC's allegations.

The investigation of the company began in 2005. In response, Dell undertook an independent investigation, completed in 2007, which led to a restatement of financial reports and remedial measures.

As a result of the new liability, the company's net income for the first quarter of Fiscal 2011 has been reduced by $100 million, or 5 cents per share. Results on a non-GAAP basis did not change.

New York Attorney General Andrew Cuomo filed an antitrust lawsuit against Intel in November 2009 for allegations that it bribed and coerced the nation's largest computer makers.

The suit contends that Intel violated state and federal anti-monopoly laws by engaging in a worldwide, systematic campaign of illegal conduct in order to maintain its monopoly power and prices in the market for microprocessors. Intel has denied the allegations, according to media reports.

Cuomo charged that:

-- In 2006, Intel paid Dell almost $2 billion in "rebates," and in two quarters of that year, rebate payments exceeded Dell's reported net income.

-- From 2001 to 2006, Intel granted Dell a privileged position vis-à-vis other computer makers in return for Dell's agreement not to market any products from Advanced Micro Devices (News - Alert), AMD, Intel's major competitor.

-- Intel and Dell collaborated to market microprocessors and servers at prices below cost in order to deprive AMD (News - Alert) of strategically important competitive successes.